"Bohol Brews: Choosing the Right Business Form"
Case Background:
Maria, an entrepreneur from Bohol, has been running a small home-based coffee roasting
business for three years. Her products have become popular in local cafés and resorts, and she
is now receiving orders from Manila and Cebu.
To expand, Maria needs more capital to buy industrial roasting equipment, hire staff, and set up
a small coffee shop. She is considering three possible forms of business organization:
1. Sole Proprietorship – She keeps full control and ownership, but she will need to take
out a large loan from the bank under her name.
2. Partnership – Her college friend, Ana, is willing to invest ₱1.5 million in exchange for a
share of profits and decision-making.
3. Corporation – A group of four local investors has offered to provide a total of ₱5 million
in exchange for shares, with Maria as the general manager.
Maria’s goals are:
• Maintain quality and brand identity.
• Expand quickly to meet growing demand.
• Limit her personal financial risk.
Task:
Analyze Maria’s situation and recommend which form of business organization she should
choose. Support your answer with clear reasoning.
Guide Questions:
1. What are the advantages and disadvantages of each form of business organization for
Maria’s case?
2. Considering her goals, which form of business organization is most suitable?
Answer (1)
Maria should choose the Corporation form of business because it best balances her goals of expansion, brand maintenance, and minimizing financial risk.
